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Bloomberg: Nexus to Start Condensate Exports From Crux by 2010 (Update1)

By Paul Gordon and Trisha Huang

May 7 (Bloomberg) — Nexus Energy Ltd., an Australian oil and gas producer, expects to start exporting condensate from its Crux field in 2010, Managing Director Ian Tchacos said.

Crux, off Australia’s northwestern coast, will produce 30,000 barrels day of sweet condensate, a low-sulfur liquid produced in association will natural-gas drilling, Tchacos said in an interview. The company will start developing the field in the first quarter of 2008, he said.

“Our key focus now is getting that project into development,” Tchacos said. “There’s no problem at all exporting those liquids. There’s a real shortage of sweet, light crudes into southeast Asia.”

Nexus shares rose 19 percent to A$1.02 on April 4 after the company announced it had found more gas than expected at Crux, increasing potential condensate production. Gas from the field will be sold to Royal Dutch Shell Plc. The company will give reserve estimates for the field in the coming week, he said.

Nexus, based in Melbourne, said last month it will sell up to 350 petajoules (330 billion cubic feet) of natural gas to Santos Ltd. from Longtom field off the coast of Victoria state.

Tchacos declined to give pricing details of the agreement with Santos, other than that the agreed price is “probably” at a premium to domestic gas prices on Australia’s eastern seaboard.

The agreement also gives Santos, Australia’s third-biggest oil and gas producer, the option to buy as much as a 35 percent stake in the Longtom project.

Santos is “under no obligation to indicate whether they’ll take up their option,” Tchacos said. Nexus expects to receive the production license from the government by the middle of this year. Santos will have two months after the issuing of the license to make a decision on the option, Tchacos added.

The Longtom project may start to supply gas to Santos as early as the middle of next year, Tchacos said.

Nexus stock rose 1.9 percent to A$1.10 today on the Australian Stock Exchange.

To contact the reporters on this story: Paul Gordon in Singapore at [email protected] ; Trisha Huang in Singapore at [email protected] .

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